In Musselwhite, T.C. Memo. 2022-57, the Tax Court held that a taxpayer’s losses from the sale of four lots (real property) were ordinary in nature, as opposed to capital.
Partnership and LLC Taxation
Interests in publicly traded partnerships (PTPs) can be a valuable part of an investor’s portfolio, but because these investments are partnership interests, the tax reporting for them can be complex, and losses passed through by PTPs may be limited. This article discusses the tax compliance and loss limitation issues involved with, and tax planning considerations for, holding interests in PTPs.
With certain restructuring transactions, careful consideration is needed to prevent the transaction from being deemed a disguised sale.
An LLC member’s distributive share of LLC income and loss from a trade or business is generally subject to self-employment tax, raising several issues around guaranteed payments, retirement payments, rental income, and members who are employees of the LLC.
This item discusses the complexities encountered when working with partnership allocations under a target capital structured operating agreement.
The owners of an LLC may be tempted to have the LLC elect to be treated as an S corporation for federal tax purposes. However, there are a host of issues that should be considered before making this move. In this article, the authors discuss 10 reasons why it may not be beneficial for an LLC to make an S corporation election.
This item discusses how to request modification of an imputed underpayment.
Twenty-nine states have enacted a passthrough entity tax as a possible workaround to the federal state and local tax deduction cap.
Final regulations issued by the IRS and Treasury allow a Sec. 754 election statement to be submitted without a partner’s signature.
Delinquent partnership returns are ‘filed’ when they are delivered by the requested method to and received by an IRS official authorized to receive such returns;
Practitioners may face a difficult analysis in helping their clients understand their possible PTE election opportunities.
For certain partners, the presumed preference for receiving a distributive share of income (including a priority profit allocation) may need further evaluation to determine how it coordinates with various international tax provisions.
This item discusses how depreciation recapture applies in certain situations involving partnerships.
This item considers to what extent taxpayers may be able to apportion basis instead under Sec. 704(c) principles.
This item provides an overview of the division rules and touches on some key issues to consider when a transaction involves a partnership division.
When LLC members receive payments for services performed for the LLC, the tax treatment depends on whether the member is performing the services in the capacity as a member.
An insufficient understanding of the rules can be dangerous to taxpayers when determining which entity has a filing responsibility in Tennessee.
This item discusses how owners selling partnership interests should address which states may attempt to tax the entire gain, how taxation of the gain may be divided among the states where the partnership does business, compliance considerations, and technical developments and trends that may affect the transaction.
No deduction is allowed in the year of sale of a basketball team for deferred compensation owed to two of the team’s players.
In eight new FAQs on its website, the IRS covers some special issues, including several that it says will be added to the forms’ instructions.